Nektan cuts losses in year-end trading update

Gibraltar-based online gambling technology and games provider Nektan plc released its audited final results for the year ended 30 June 2017 on Monday, providing a post period-end trading update and a separate announcement that it has raised GBP 1,759,535 through a placing of 5,095,243 new ordinary shares and subscriptions for 3,283,495 new ordinary shares both at a price of 21p per share.

Operational and strategic highlights for the company included:

* Revenue growth of 124 percent to GBP 13.3 million (2016: GBP 5.9 million);
* All KPIs showed a marked improvement during the year;
* Net Gaming Revenue up by 130 percent to GBP 13.1 million (2016: GBP 5.7 million);
* Recruited 130,105 new First Time Depositing Players (FTDs) (2016: 49,176);
* Total cash wagering up by 157 percent to GBP 390.3 million (2016: GBP 151.9 million);
* Processed 423.5 million transactions (bets or spins) (2016: 176.9 million);
* Adjusted EBITDA loss of GBP 3.4 million (2016: GBP 5.7 million) and an operating loss for the year of GBP 4.6 million (2016: GBP 8.3 million);
* In December 2016, the company announced the placing of new shares and an offer for subscription which raised GBP 2.275 million at a price of 27.5p per share;
* Significant product improvements, including multi-language and currency functionality, helping to increase the number of current and new casino partners and in new geographies;
* Enhanced games portfolio from key global studios taking the total number of games to 400+, helping to strengthen Nektan’s attractions to customer partners;
* Launched 19 new casinos on its network taking the total at year end to 75 casinos from 51 partners;
* Signed first B2B contract leveraging the group’s multi-geographic assets, expertise and reach, by delivering a set of services and solutions, from games licensing to software, across European and North American markets;
* Bought out the remaining 50 percent of Respin LLC, its US joint venture, now rebranded as Rapid Games;
* Entered into an asset disposal and simultaneous separate five year licensing agreement with Buckingham HMB Ltd for three of the company’s wholly owned gaming brands for GBP 1.95 million in cash;
* Reached agreement to buy out its joint venture partner in Nektan Marketing Services Limited (“NMS”) for GBP 500,000 payable in cash over 12 months to terminate the put and call option between Nektan and its joint venture partner.

Post year-end highlights included:

*Opened a further 19 casinos taking the total to 94 from 52 partners;
* Evolve Lite, Nektan’s B2B platform, went live in November 2017, opening up new revenue streams;
* In July 2017, the company secured commitments to raise GBP 2,500,000 through an unsecured loan facility, with two of its directors, Gary Shaw and Sandeep Reddy of which GBP 1,985,000 has currently been drawn down;
* Signed first global platform deal for Evolve Lite with Malta based gaming company, Tyche Digital Malta Limited;

The Company announced separately today that it has raised GBP 1,759,535 through a placing of 5,095,243 new ordinary shares and subscriptions for 3,283,495 new ordinary shares both at a price of 21p per share.

Gary Shaw, interim chief executive officer of Nektan, said:

“In Europe, Nektan will continue to focus on its core Managed Solutions business offering, whilst leveraging the infrastructure and capability to roll out its B2B business. In the US, we continue to see a number of opportunities to use Evolve with the mobile in venue casino system, in what is likely to be one of the largest global mobile gaming markets.

“We have just signed our first platform deal and are focusing on leveraging our language capability, which we have built within the software, so that we would expect to be live in the US, Europe and Asia in our current financial year. As we have only one business line covering our central technology cost for Managed Solutions Europe, we expect to see significant margin uplift as we turn on and develop these new revenue lines. We also would expect a similar growth trajectory to our European Managed Solutions business giving the business material scalability as we utilise the same software platform across additional continents, whilst at the same time being highly relevant for the localised marketplaces.

“The Company is well placed to maximise revenue and margin growth across both North American, Europe and additional geographies.”